The Apple Watch was supposed to be a big threat to established Swiss watchmking brands like TAG Heuer, whose sporty timepieces often serve as entry level luxury choices for people buying their first “real” watch.
You can pick up a simple TAG Formula 1 watch, in stainless steel, quartz-powered, for less than $1,000.

A comparable Apple Watch, once you add the $450 stainless-steel bracelet, comes in around $1,000. But of course you can spend a lot less. And the Apple Watch does a whole lot more than tell the time, which is about all the TAG F1 does.

When you move up to Omegas and Rolexes, with automatic movements and much more status appeal, you’re talking $4-8,000. Properly cared for, the Tag will last pretty much forever. So will the Omegas and the Rolexes. The Apple Watch, pointedly, probably won’t.

But the thinking before the Apple Watch launch was that Omega and Rolex were safe, whereas TAG wasn’t. If your timepiece has to say something about your taste, better to do it later with a Rolex and wear a smartwatch on a daily basis. See ya later, TAG.

TAG Heuer CEO Jean-Claude Biver clearly took this dire prediction to heart and set TAG on a course to this week introduce what to my eye looks like the first real competitor to the Apple Watch to emerge from watchmaking’s traditional Swiss stronghold: the Tag Heuer Connected.

Ironic, isn’t it, that the company the Apple Watch was supposed to do in (TAG is part of the luxury conglomerate LVMH) could be its first meaningful foe in the smartwatch wars?

Why is it so good?
When you get right down to it, smartwatches aren’t quite ready for prime time. On CNBC, Biver noted with astonished enthusiasm that since the Apple Watch was introduced, it’s sold million of units. This from a company that had never had anything to do with watches before.

Still, even the Apple Watch is basically just a watch without an iPhone to add to its functionality. And, from my perspective, not a very good watch. I’m actually not sure that Apple even knows what do with the thing, long-term.

I haven’t yet handled the TAG Heuer Connected, but it looks like the nicest smartwatch on the market (the $15,000 Apple Watch Edition, in gold, notwithstanding).

Critically, it isn’t trying to avoid being a watch. Powered by the Android Wear operating system and Intel processors, the TAG is built like a watch, with a lightweight titanium case and a rubber strap that comes in various different colors. As with most high-end watches, there are Tag logos on the crown and the clasp on the band — small details that matter to true watch fans.

It can’t say “Swiss Made” on the dial (it’s built in Asia), but it can say “Swiss Engineered” on the case. The clincher, however, is the dial, where Swiss heritage finally gets an opportunity to push back against Apple.

The Connected’s face is designed to refer very explicitly to TAG’s most famous watch, the Carrera chronograph, created by Jack Heuer as a tool for motorsport (“Carerra” recalls the Carerra Panamericana, a road race run in Mexico in the 1950s; the chronograph function allowed for relatively precise timing). Several additional face designs can also be activated. To be sure, the Apple Watch can show different faces and complications, but only TAG can really display, with crediblity, what many watch lovers consider to be among the greatest timepiece designs in history.

The Connected also comes with an interesting piece of upselling marketing, which at base is kind of passive-aggressive. At $1,500, it isn’t cheap. It will also, like all smartwatches, probably lose some functionality as it ages (it has to be recharged daily, just like the Apple Watch). But TAG has created an intriguing trade-up option. After two years, for an additional $1,500, you can unload the connected for a similar Carerra design that has a mechanical movement.

So you wind up having spent $3,000, a bargain in the luxury watch world, for a groundbreaking smartwatch that you may not like that much plus, potentially, a well-regarded modern version of TAG’s best-known watch. Sure, maybe you’ll want to upgrade to the next version of the Connected, and maybe you won’t. But if you don’t, TAG will send you home with a fine timepiece that could last decades. Yes, a bit passive-aggressive. But also savvy.TAG’s goal here is to stay in the game as smartphones become more popular while simultaneously tapping the ambivalence that luxury watch enthusiasts have for wearable tech. If you’re going to wear something, make it a great Swiss watch. And if you do that, you don’t have the wrist real estate for a smartwatch.

The TAG Connected is the best of both worlds, although to be sure if you’re buying a smartwatch you may decide that the Apple Watch OS is simply too compelling to avoid. That said, a product has finally hit the market that could give the Apple Watch a run for its, and your, money.

For many South Korean consumers, the chaebol, family-owned conglomerates that are into everything from electronics to amusement parks, are a source of pride. For investors, they can be a headache. Shareholders were reminded of this in May when Samsung proposed to merge two of its affiliates: Cheil Industries, the group’s de facto holding company, and Samsung C&T, the country’s biggest construction firm (it put up the world’s tallest building, the Burj Khalifa in Dubai).

When the deal was announced, Cheil’s share price was around its highest since its IPO in December, and that of C&T was near a five-year low. CLSA, a stockbroker, said the deal would give Cheil the core operations of C&T “effectively for free”, after subtracting the value of its stakes in other group companies. That would suit Lee Jae- yong, the only son of Samsung’s chairman, Lee Kun-hee. The elder Mr Lee has been in hospital for over a year since a heart attack; his son is preparing to pay about $5 billion in inheritance tax while keeping family control of the group, through small stakes in a hairball of cross-shareholdings. The merger allows Mr Lee to consolidate that structure, and to gain more than $12 billion in stakes in other Samsung companies, including a further 4.1% stake in Samsung Electronics, its flagship firm.

Not so fast, said Elliott Management. The American hedge fund (widely known as a “vulture” fund for its investments in distressed debt) boosted its C&T stake after the merger was announced, becoming its third-largest investor, and filed a lawsuit to block the deal. Elliott argues that the merger is unfair for C&T shareholders, who it says will lose $7 billion due to the huge disparity in the two firms’ valuations: when the merger was announced, Cheil’s stock was trading at over 130 times forecast earnings, whereas C&T’s ratio had slipped to around 20. (Firms in South Korea’s KOSPI index on average have a forward price-earnings ratio of about 11.)
A court in Seoul has rejected two injunctions filed by Elliott to try to halt the deal; it ruled that the ratio by which shares in C&T will be swapped for Cheil shares did not indicate any price manipulation. South Korean law says that the ratio must be based on average stock prices over the previous month, a formula that Samsung used. Samsung contends that the deal will “ultimately increase shareholder value” by fusing the global network of its construction arm with Cheil’s food and fashion businesses, though it is vague on how bringing together outfits from such different industries will save much money.

The conflict will come to a head on July 17th, when C&T’s shareholders vote on the deal. Two influential investor-advisory firms, ISS and Glass Lewis, have urged them to reject it. Each side is lobbying other shareholders, made up of foreign investors (who hold about a third of C&T shares), domestic private investors (who have just over a third) and South Korea’s National Pension Service (NPS), which has a stake of almost 12% and could be the swing voter. In November an attempt to merge two other group companies, Samsung Heavy Industries and (loss-making) Samsung Engineering, was blocked by the NPS, which threatened to exercise an option to sell its shares in both firms rather than end up with a stake in the merged entity.

Shin Jang-sup, an economist at the National University of Singapore, says Elliott has already benefited handsomely from its investment in C&T, with gains he estimates at more than 100 billion won ($100m). In Mr Shin’s view, South Korea has strict trading regulations and a crippling tax on inherited management rights: it is because the chaebol are under such strict regulation, he says, that they have looked for ways around them.

Sweeping reforms after the Asian financial crisis of 1997-98 boosted shareholders’ rights and required large listed companies to bring in more outside directors, for a time placing South Korea ahead of Japan in the strength of its corporate-governance laws. But lobbying by the chaebol has since undone much of the good work, says Kim Woo-chan, an economist at Korea University in Seoul. Only one big chaebol, LG, has swapped its cross-shareholdings for a transparent holding-company structure. South Korea now ranks at the bottom of Asian corporate-governance league tables, with Indonesia and the Philippines.
The low valuation of South Korean firms relative to their developed-country peers, known as the “Korea discount”, is blamed on corporate-governance worries. Last year Hyundai Motors caused investor concern when it bought land in Seoul for 10.6 trillion won, triple its assessed value, for a glitzy new headquarters. The heads of four chaebol—Samsung, Hanwha, Hyundai Motors and SK Telecoms—have been convicted of crimes in the past decade.

The government has begun to push firms to redistribute their huge piles of cash in increased wages or dividends. The president, Park Geun-hye, initially championed “economic democratisation”—passing a law to give the country’s Fair Trade Commission greater powers in levying fines on illegal transactions benefiting chaebol family members, and another preventing new cross-shareholdings. But she has since focused on reviving a sluggish economy that is dependent on the chaebol: last year two of her ministers suggested that convicted tycoons be pardoned if they could contribute to boosting economic growth.

Bruce Lee, head of Zebra Investments, one of South Korea’s few funds focused on corporate governance, says that even if Elliott’s bid fails, it is only “the start of growing pains”: its challenge comes at a time when succession issues loom at other chaebol—and as South Koreans become increasingly frustrated with the families’ sense of entitlement. In a rare show of solidarity, a group of small C&T shareholders have delegated their voting rights to Elliott. Some have even bought their first shares in C&T, simply to vote against the merger.

Although Apple hasn’t revealed any official sales numbers—and says it doesn’t plan to—several unofficial estimates claim that Apple has at least cracked the 1 million sales mark. Google’s Android Wear platform only shipped 720,000 units in all of 2014, according to Canalys.
Just as it did with smartphones and tablets, Apple has essentially created the smartwatch market. But don’t write off Android Wear just yet. Through a series of seemingly low-key changes, Google is quietly positioning itself for a stronger second act.

A few weeks ago, Google announced Android Wear 5.1.1, and while the version number doesn’t suggest major improvements, the update will make third-party apps much more useful.
One notable change extends Android Wear’s always-on display capabilities to third-party apps, so they can leave information on the screen in a low-power, black-and-white mode. Prior to the update, Android Wear would always revert to the clock screen after a few seconds of inactivity, regardless of what you were doing.
[…]
Google will also make it easier to open smartwatch apps in the first place, with a launcher that users can open by tapping on the main screen. When Android Wear first launched, Google seemed to deliberately hide the launcher, preferring that app makers focus on actionable notifications. But developers say Google may have gotten ahead of itself with that plan.
“My guess is they went a bit too fast going notification-only and they found users are confused by the lack of structure,” says Q42 developer Taco Ekkel, who created an app for controlling Philips Hue light bulbs. “The notification-instead-of-apps model is the future, but people (both users and many app developers) need time to get there.”
In the meantime, the launcher will give users easier access to functions that might not come up through notifications alone. Aaron Sarazan, who leads Android development for the personal finance app Level Money, says notifications are great for showing a record of recent transactions, but not so much for letting users look up how much they can spend. “Just by virtue of removing the number of taps to get to the app list, that helps a lot,” he says.
Google’s original vision for Android Wear had little to do with launching apps on your wrist. Instead, Wear was supposed to deliver information in just the right context, either through app notifications or cards from Google Now.
It was the right idea, but the execution was flawed. In many cases, Google Now can be useless (as in every time it offers directions back to work from your lunch break), creepy (like when it reminds you of recent Google searches), or just annoying (like when it pesters you with updates from a site you visited once). Turn off enough of the things that bother you about Google Now, and you may not be left with much. This in turn puts undue pressure on notifications, which themselves can be bothersome without careful pruning.
[…]
Google Now, for instance, is already available for iOS, and while the new third-party integrations are currently Android-only, it’s possible that this could change in the future. The same could be true for Google’s Custom Voice Actions.
As for standalone apps, Level Money’s Sarazan says getting them to work with a paired iPhone probably wouldn’t require much work, especially if Google provides an API to forward data to the watch over Bluetooth. “Maybe it would have to use a different Bluetooth protocol but that would probably be trivial for the end developer,” he says. Between standalone apps, Google Now, and voice actions, Android Wear might not even need actionable notifications to feel like a capable platform.

In any case, Google has time to get it right. The smartwatch industry is still young, and while the Apple Watch is getting most the attention, the developers I spoke with aren’t walking away from Android Wear anytime soon. With better software and a wider potential user base, Google’s smartwatch platform still stands a fighting chance.

The reason why sales are shrinking appears to be pretty obvious. There isn’t a good reason to own three Apple gadgets — a Mac, iPhone, and iPad — when a combination of just two of them will do. And now that iPhones come with larger screens, there’s even less of a reason to buy an iPad along with it.

This is not to say the iPad is a bad tablet. It’s a wonderful tablet, the best you can buy. And it’s likely the primary computer for a lot of people who don’t need to do much beyond checking Facebook and some light emailing. But keep in mind the modern tablet space is only four and a half years old. We’re still learning how people use them and how often they upgrade.

Apple CEO Tim Cook admitted as much on today’s earnings call.

“People hold onto iPads longer than they do a phone,” he said. “We’ve only been in this business four years. We don’t know what the upgrade cycle will be.”

If you have a third-generation iPad with Retina Display (which launched in early 2012) or later, there’s no reason to upgrade to one of the new iPads Apple introduced last week. Yes, the new models are faster, thinner, and have better cameras, but even iPads that are two and a half years old are more than capable and plenty thin and light.

iPads either need to learn how to do more in order to entice people to upgrade, or we should retool expectations for how often people should upgrade them. The iPhone may last about two years for the typical user, but the iPad might be a four- or five-year upgrade.

Here’s to the crazy ones. The misfits, the rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the ones who are crazy enough to think that they can change the world, are the ones who do.
I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.

It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn’t know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down – that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple’s current renaissance. And Laurene and I have a wonderful family together.

I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

My third story is about death.

When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.

This was the closest I’ve been to facing death, and I hope it’s the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960’s, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Grignon had been part of the iPhone rehearsal team at Apple and later at the presentation site in San Francisco’s Moscone Center. He had rarely seen Jobs make it all the way through his 90-minute show without a glitch. Jobs had been practicing for five days, yet even on the last day of rehearsals the iPhone was still randomly dropping calls, losing its Internet connection, freezing or simply shutting down.

“At first it was just really cool to be at rehearsals at all — kind of like a cred badge,” Grignon says. Only a chosen few were allowed to attend. “But it quickly got really uncomfortable. Very rarely did I see him become completely unglued — it happened, but mostly he just looked at you and very directly said in a very loud and stern voice, ‘You are [expletive] up my company,’ or, ‘If we fail, it will be because of you.’ He was just very intense. And you would always feel an inch tall.” Grignon, like everyone else at rehearsals, knew that if those glitches showed up during the real presentation, Jobs would not be blaming himself for the problems. “It felt like we’d gone through the demo a hundred times, and each time something went wrong,” Grignon says. “It wasn’t a good feeling.”

[…] Grignon knew the iPhone unveiling was not an ordinary product announcement, but no one could have anticipated what a seminal moment it would become. In the span of seven years, the iPhone and its iPad progeny have become among the most important innovations in Silicon Valley’s history. They transformed the stodgy cellphone industry. They provided a platform for a new and hugely profitable software industry — mobile apps, which have generated more than $10 billion in revenue since they began selling in 2008. And they have upended the multibillion-dollar personal-computer industry. If you include iPad sales with those for desktops and laptops, Apple is now the largest P.C. maker in the world. Around 200 million iPhones and iPads were sold last year, or more than twice the number of cars sold worldwide.

[…] It’s hard to overstate the gamble Jobs took when he decided to unveil the iPhone back in January 2007. Not only was he introducing a new kind of phone — something Apple had never made before — he was doing so with a prototype that barely worked. Even though the iPhone wouldn’t go on sale for another six months, he wanted the world to want one right then. In truth, the list of things that still needed to be done was enormous. A production line had yet to be set up.Only about a hundred iPhones even existed, all of them of varying quality. Some had noticeable gaps between the screen and the plastic edge; others had scuff marks on the screen. And the software that ran the phone was full of bugs.

The iPhone could play a section of a song or a video, but it couldn’t play an entire clip reliably without crashing. It worked fine if you sent an e-mail and then surfed the Web. If you did those things in reverse, however, it might not. Hours of trial and error had helped the iPhone team develop what engineers called “the golden path,” a specific set of tasks, performed in a specific way and order, that made the phone look as if it worked.

But even when Jobs stayed on the golden path, all manner of last-minute workarounds were required to make the iPhone functional. On announcement day, the software that ran Grignon’s radios still had bugs. So, too, did the software that managed the iPhone’s memory. And no one knew whether the extra electronics Jobs demanded the demo phones include would make these problems worse.

Jobs wanted the demo phones he would use onstage to have their screens mirrored on the big screen behind him. To show a gadget on a big screen, most companies just point a video camera at it, but that was unacceptable to Jobs. The audience would see his finger on the iPhone screen, which would mar the look of his presentation. So he had Apple engineers spend weeks fitting extra circuit boards and video cables onto the backs of the iPhones he would have onstage.The video cables were then connected to the projector, so that when Jobs touched the iPhone’s calendar app icon, for example, his finger wouldn’t appear, but the image on the big screen would respond to his finger’s commands. The effect was magical. People in the audience felt as if they were holding an iPhone in their own hands. But making the setup work flawlessly, given the iPhone’s other major problems, seemed hard to justify at the time.

The software in the iPhone’s Wi-Fi radio was so unstable that Grignon and his team had to extend the phones’ antennas by connecting them to wires running offstage so the wireless signal wouldn’t have to travel as far. And audience members had to be prevented from getting on the frequency being used. “Even if the base station’s ID was hidden” — that is, not showing up when laptops scanned for Wi-Fi signals — “you had 5,000 nerds in the audience,” Grignon says.“They would have figured out how to hack into the signal.” The solution, he says, was to tweak the AirPort software so that it seemed to be operating in Japan instead of the United States. Japanese Wi-Fi uses some frequencies that are not permitted in the U.S.

There was less they could do to make sure the phone calls Jobs planned to make from the stage went through. Grignon and his team could only ensure a good signal, and then pray. They had AT&T, the iPhone’s wireless carrier, bring in a portable cell tower, so they knew reception would be strong. Then, with Jobs’s approval, they preprogrammed the phone’s display to always show five bars of signal strength regardless of its true strength. The chances of the radio’s crashing during the few minutes that Jobs would use it to make a call were small, but the chances of its crashing at some point during the 90-minute presentation were high. “If the radio crashed and restarted, as we suspected it might, we didn’t want people in the audience to see that,” Grignon says. “So we just hard-coded it to always show five bars.”